Beneficial Ownership Register

On June 10, 2022, amendments to the Business Corporations Act came into effect requiring corporations in New Brunswick to create and maintain a register of individuals with significant control (shareholders who own 25% or more of the voting shares).

Along with other corporate records, the corporation’s Head Office must keep a register consisting of a logbook, database or spreadsheet containing information of individuals with significant control.

The register must include the individual’s:

• name
• date of birth
• address
• country of residence for tax purposes
• the date when control started
• the date when control ended
• a description of how the individual has significant control

Corporations must update their register annually and within 15 days of becoming aware of a change affecting their register. Corporations are required to provide copies of the register to law enforcement, tax and other authorities, as prescribed in the legislation, upon request.

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A beneficial owner is an individual who owns or controls 25 per cent or more of the voting shares of a corporation.

This could be through direct ownership or through ownership of another company.

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The transparency of ownership of corporations is important in efforts to prevent tax evasion and other illegal activities.

Corporations can be implicated in money laundering, funding of terrorism, tax avoidance and other illegal criminal schemes to conceal the origin or the destination of funds as well as the identity of perpetrators.

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Corporations will be required to create and maintain a register of individuals who are considered to have significant control in their corporation. To access a template of a register, please visit Register of Individuals with Significant Control.

Either annually or when individuals with significant control change, corporations will be required to validate or update the beneficial ownership register.

This means taking reasonable steps to contact their beneficial owners to determine if their address or any of their contact information has changed. This information is to be added to the register.

If the individuals with significant control in the corporation changes, the company will have to update the register within 15 days of becoming aware of the new information.

Service New Brunswick has provided a sample template to assist businesses in creating their beneficial ownership register. Please visit Register of Individuals with Significant Control.

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An individual with significant control over a corporation is defined as:

An individual who has any of the following interests or rights, or any combination of them, in a “significant number of shares” of the corporations:

1. the individual is the registered holder of the shares,
2. the individual is the beneficial owner of the shares, or
3.  the individual has direct or indirect control or direction over the shares.

A “significant number of shares” of a corporation will be defined as:

1. any number of shares that carry 25% or more of the voting rights attached to all of the corporation’s outstanding voting shares, or
2. Any number of shares that is equal to 25% or more of all of the corporation’s outstanding voting shares.

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The register will contain the following information regarding each individual who is considered as having significant control:

1. the name, date of birth and last known address;
2. the jurisdiction of residence for income tax purpose;
3. the day on which each individual became or ceased to be an individual with significant control; and
4. a description of how each individual is an individual with significant control, including a description of their interests and rights in respect of shares of the corporation

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The corporation will be required to update the register at least once a year. This means taking reasonable steps to find out if any of the information has changed and whether any new individuals need to be listed or removed.

In addition, when the corporation becomes aware of a change affecting the register, it needs to update the register within 15 days of becoming aware of the new information.

The register is to be kept at the location where the corporation keeps corporate information, such as by-laws and articles of incorporation.

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The following individuals or entities have access to the information in the register upon request:

1. Investigative bodies, regulatory bodies, tax authorities and police services;
2. Director of the Business Corporations Act;
3. Shareholders and directors of the corporation by providing an affidavit and there will be restrictions placed on the use of the information.

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The misuse of information contained in the beneficial ownership register will be a category G offence per the Provincial Offences Procedures Act.

Therefore, a fine may be imposed ranging from $240 to $15,200.

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Failure to create and/or maintain a beneficial ownership register will be a category F offence under the Provincial Offences Procedures Act.

Therefore, a fine may be imposed ranging from $240 to $10,200.

The failure to disclose the information contained in the register is also a category F offence.

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The failure of a beneficial owner to provide their information to the corporation will be a category F offence under the Provincial Offences Procedures Act (POPA).

Therefore, a fine may be imposed ranging from $240 to $10,200.

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